Time to Watch – Not Buy or Sell

With the employment number out and interest rates moving higher (because of the 2.9% year over year wage increase) by 4 basis points we may have another day of setbacks in the income issues market.

While it is very possible that most preferreds and baby bonds may fall today we think that bigger bargains may be yet to come in the next 5 months.  If you are a purely income investor not so worried about you capital maybe you want to nibble a bit.

If you are buying now we would stick to high yield (mortgage REITs?), fixed-to-floating, short maturity baby bonds and term preferreds.

For holders of the high quality, low coupon perpetual issues DON’T panic.  If you own these kind of issues we assume you are in it for the safe income stream and this will continue, but studying your brokerage statement multiple times a day is a good way to do HASTY things like selling.  DON’T become a buy high, sell low income investor–although honestly at least 1/2 of individuals are this type of investor.

3 thoughts on “Time to Watch – Not Buy or Sell”

  1. That said, I did sell all my WFC-L today @ 1270 after selling my BAC-L near 1330 earlier. Both LTG as I bought both when they yielded over 6%.
    No need to watch it fall farther. Put a little of the proceeds into PBFX and ETP to catch this qtr’s dist.
    Holding off on everything else, though watching KIM, MPW and SNH to see just how far this will go. I have doubts that the Fed can raise too much or the markets might really crack.
    P.S. Really like what you’re doing here…
    JMO

    1. Hi Camroc–thanks for stopping by.

      Better to take a little profit if it helps to sleep at night. I know you put thought into your moves and have been investing long enough to know what to do.

      A lot of what I write is geared toward the newer folks–the youngsters that have just started some income investing.

      Hope I can bring some value to you in the years ahead.

      Good luck

      Tim

  2. All my holdings including my preferreds always have a % trailing stop loss attached, usually 10-12% . The highr the beta the higher the stop loss %…

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